How To Start A Makeup Brand

Start A Makeup Brand

article

When it comes to starting a makeup brand, you may find yourself in a place where you have to make some big decisions.

You may be asking yourself:

  • What's the first step in establishing my business?
  • How much will it cost to start my makeup brand?
  • How do I price my makeup brand?
  • How do I market my makeup brand?
  • ... so much more!

We walk you through all of the steps; from idea → starting → launching → growing → running your business.

The purpose of this guide is to act as an outline for the steps you'll need to take to get your business running successfully!

market size
$85B
starting costs
$42.2K
gross margin
80%
time to build
10 months
average product price
$606
pros & cons
36 Pros & Cons
tips
10 Tips

💡 Introduction To Starting A Makeup Brand

Is Starting A Makeup Brand Right For You?

There are many factors to consider when starting a makeup brand.

We put together the main pros and cons for you here:

Pros of starting a makeup brand

• Flexibility

You can put as much time into the business as you'd like. If you like the work and have some initial experience, you can start small and manage all aspects of the business on your own.

• Rewarding work

Starting a makeup brand can be really rewarding work. After all, you are solving an immediate issue for your customer and you're working on something you truly care about.

• Scalable

With businesses and processes changing daily, there will always be demand for new features, products and services for your business. Additionally, there are several different business models and pricing tiers you can implement that will allow you to reach all types of customers.

• Meaningful business connections

You never know who you will meet as a makeup brand. This could be the start of an incredible business opportunity!

• High customer retention rates

Once a customer invests in your product, they've invested their time and energy to utilize your product/service which is highly valuable to them. Typically, your product or service becomes indispensable to your customer.

• High margins

The gross margins for your makeup brand are typically around 80%, which is considerably high and allows you to grow your business and manage costs easily.

• Easy to encourage "impulse buy"

In the makeup brand, you have a much higher chance of encouraging your customers to buy on impulse - you can easily alter the price, placement, packaging, and promotional value to influence the decision of your buyer.

• Control of workload

With starting a makeup brand, you have the unique ability to choose how little or how much you want to work. You also have the freedom to decide which projects you want to work on, and can turn down the ones that do not interest you.

• Unlimited income potential

With starting a makeup brand there is no cap as to how much income you can make. The stronger your business skills and the more energy/time you put into your career, the more you'll make.

• Amazing perks and discounts

Working in the makeup brand comes with its perks! As a seller for these products/services, you typically also get to enjoy industry perks and discounts.

• Predictable income stream

Your businesses income stream tends to be predictable based on the number of customers you have signed up. This makes financial planning and outlooks much more seamless!

• Higher likelihood of getting referrals

This business is all about referrals, which can be a a very impactful way to attract and retain customers. It's critical that you have a great referral program in place that incentivizes your customers to tell their friends about your product.

• You can sell your product in various places!

There are various different markets to sell your product, which will help you reach different audiences and revenue streams.

• Simple business model

A makeup brand has the advantage of a simple business model, which makes launching and building the business more seamless.

• Control your own destiny

Starting A Makeup Brand allows you to control every aspect of your life and make your own dreams come true every day.

• Greater Income Potential

With this business, the sky is the limit in regards to your income potential.

• You get to inspire others

Your business is one that encourages and inspires others, which in itself, can be very fulfilling.

• You can promote and sell your product on Amazon

Although there are some disadvantages to consider when selling your product on Amazon, there are also a host of benefits. Mainly, Amazon is the world's largest online retailer, so you're bound to tap into new business and reach an entirely new audience.

• Can build solid foundation of clients

It's unlikely you will have one-off customers as a makeup brand. Typically, you have a solid foundation of clients that use your product and services regularly.

• Low maintenance customers

In this industry, customers are known to be very appreciative and low maintenance. This can help with your stress levels and allow you to focus on growing your business.

• Results and revenue happen quickly!

Unlike other businesses, it can be relatively quick to start seeing results and revenue. As long as you follow all the steps to validate your idea before launch, you are likely to see quick results and ROI.

Cons of starting a makeup brand

• Motivation of employees

If you plan to have a sales/content team on board, finding creative ways to motivate them can be a challenge. It's important that you're able to offer great incentives and a good work environment for your employees.

• Longer Sales Process

A makeup brand can be a big time and money investment for your customer, so it's important you plan and predict a longer conversion funnel and stay in communication with potential customers.

• High employee turnover

In the makeup brand, employee turnover is often high, which can be quite costly and time consuming for your business. It's important to try and avoid this as much as possible by offering competitive pay, benefits, and a positive work environment.

• Taxes

As a makeup brand, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.

• Niche Market

A niche business is not necessarily a bad thing, in fact, it can be the key to your success. However, it can be more challenging and time consuming to find the perfect niche market and target audience.

• High overhead expenses

With starting a makeup brand, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.

• You may need to charge sales tax

If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article

• Churn

In this business, customers can cancel their membership or subscription for your services - which can make revenue forecasting challenging and unpredictable. It's important to focus on your churn rates and trends so that you can prevent this as much as possible.

• Time commitment

With starting a makeup brand, all responsibilities and decisions are in your hands. Although this is not necessarily a negative thing, work life can take over at times. This can place a strain on friends and family and add to the pressure of launching a new business.

• Difficult to build trust with your customer

With starting a makeup brand, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business.

• Impatient customers

You may offer an engaging user experience for your customer, but customers expect a lot and may be impatient if they aren't pleased with your product or service.

• Learning Curve

When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.

• Equipment Breakdowns

Over the years, your equipment can get damaged, break down, and may need repairs which can be expensive. It's important you prepare for these expenses and try to avoid damages/wear & tear as much as possible.

• Technical issues can be frustrating

Technical issues are common in this business. If you struggle with the technical side of things, you may want to consider outsourcing this responsibility to save yourself the time and frustration.

• More challenging to earn passive income

It can be more of a challenge to make passive income in this business. Often times, the amount of revenue you bring in is limited by the amount of time you have in the day.

Players

Big Players

Small Players

Search Interest

Let's take a look at the search trends for makeup over the last year:

How To Name Your Makeup Brand

It's important to find a catchy name for your makeup brand so that you can stand out in your space.

Here are some general tips to consider when naming your makeup brand

  • Avoid hard to spell names: you want something easy to remember and easy to spell for your customers
  • Conduct a search to see if others in the space have the same name
  • Try not to pick a name that limits growth opportunities for your business (ie. if you decide to expand into other product lines)
  • As soon as you have an idea (or ideas) of a few names that you love, register the domain name(s) as soon as possible!

Why is naming your makeup brand so important?

The name of your business will forever play a role in:

  • Your customers first impression
  • Your businesses identity
  • The power behind the type of customer your brand attracts
  • If you're memorable or not

It's important to verify that the domain name is available for your makeup brand.

You can search domain availability here:

Find a domain starting at $0.88

powered by Namecheap

Although .com names are the most common and easiest to remember, there are other options if your .com domain name is not available. Depending on your audience, it may not matter as much as you think.

It's also important to thoroughly check if social media handles are available.

As soon as you resonate with a name (or names), secure the domain and SM handles as soon as possible to ensure they don't get taken.

Here's some inspiration for naming your makeup brand:

  • Careful Contour check availability
  • MoxieKnit check availability
  • EliteWave check availability
  • Stunners Hub check availability
  • Realz check availability
  • Beauty Full check availability
  • The Beauty Queen check availability
  • How-To Beauty check availability
  • Beauty + Brains check availability
  • Blushed And Beautiful check availability
  • Go Go Guru check availability
  • Awareness Beauty Hub check availability
  • Highlighter Reel check availability
  • FiloWright check availability
  • Magic Smears check availability
  • Glamourholic Mom check availability
  • Spatacular check availability
  • Bountiful Beauty check availability
  • Beaucoup Beauty check availability
  • Stunners Hub check availability
  • Beautifly check availability
  • Awareness Beauty Hub check availability
  • Bluepearl Spa check availability
  • Product Paradise check availability
  • Hidden in Love check availability
  • Diamond Colors check availability
  • ProStyle Makeup Co. check availability
  • Beautification Station check availability
  • Beauty Bounty check availability
  • Proven Beauty check availability
  • Mellafex check availability
  • Great Touches check availability
  • Beautiful You check availability
  • Contour Queens check availability
  • Bonita Beauty check availability
  • Smooth Transitions check availability
  • Beauty Touch check availability
  • Bold And Beautiful check availability
  • WhiteMax check availability
  • Get Makeup And Go check availability
  • Dot Fusion check availability
  • Vogue Styles check availability
  • Beauty Style check availability
  • Ravishing Reviews check availability
  • The Beauty Rules check availability
  • The Beauty Expert check availability
  • Stunning Chic check availability
  • SpySock Makeup Co. check availability
  • RightZox Makeup Co. check availability
  • Beauty Charm check availability
  • Stardom Cosmetics check availability
  • vanillicious check availability
  • Cinderella’S Secret check availability
  • Flonexx Makeup Co. check availability
  • Tell-All Tutorials check availability
  • The Minimal check availability
  • Famous check availability
  • NewCosmetic check availability
  • RightCosmetic check availability
  • Brown check availability
  • The Containing Enhancive check availability
  • Ideological check availability
  • Male Esthetical Pro check availability
  • Overall check availability
  • The Wear check availability
  • Sensitive Scrape check availability
  • Tight check availability
  • The Pancake Makeover check availability
  • Certain Cosmetic Dentistry check availability
  • The Sallow check availability
  • The Normal check availability
  • Bear cub Makeup check availability
  • The Deer Shin check availability
  • Finished Aesthetical Co check availability
  • Unique Mascara check availability
  • Enough Makeup check availability
  • Cultural Chiropractic check availability
  • The Excess Abrade check availability
  • SpiritualMakeup check availability
  • Bark Trading Co check availability
  • The Scaly check availability
  • Leathery Bark Trading Co check availability
  • ThickCosmetic check availability
  • SuchCosmetic check availability
  • The Excellent Enhancive check availability
  • The Bear Pelt check availability
  • Shiny Stub check availability
  • Cosmetology Collective check availability
  • The Experimental check availability
  • Hide Spot check availability
  • The Bluish check availability
  • Abrade Spot check availability
  • Domestic Cosmetic check availability
  • The Excessive check availability
  • The Powerful check availability
  • Such check availability
  • Unique Face Collective check availability
  • Intellectual Cosmetic check availability
  • Sallow Struggle check availability
  • The Finished check availability
  • Cultural Cosmetic Surgeon check availability
  • Offending check availability
  • Scrotal Scrape check availability
  • The Overlying check availability
  • Physical Mascara Spot check availability
  • The Emotional check availability
  • Minimal Manicure check availability
  • The Green Nonfunctional check availability
  • Shiny Scrape check availability
  • Sallow Stub check availability
  • Damaged Bark Group check availability
  • The Only check availability
  • The Best Nonfunctional check availability
  • The Garish Make Up check availability
  • Enough Constitution check availability
  • Healthy check availability
  • Itchy check availability
  • The Deep Superficial check availability
  • Red check availability
  • Shin Group check availability
  • Much Moulage check availability
  • Vaunted Superficial Co check availability
  • Wrinkled Peel check availability
  • Beauty Spot check availability
  • Perfect Beauty check availability
  • PinkSkin check availability
  • Perfect Paint Group check availability
  • Constitutional Composition Collective check availability
  • Uncut Makeup check availability
  • Molecular Makeover check availability
  • Wet Shinny Co check availability
  • Containing Cursory check availability
  • Phosphorescent Freshness Spot check availability
  • Peculiar Mascara check availability
  • Pleasant Incandescence Collective check availability
  • Yellowish Shine Group check availability
  • Intense check availability
  • Paint Place check availability
  • Rosy check availability
  • Makeover Trading Co check availability
  • Physiological Cosmetic Group check availability
  • FamousCosmetic check availability
  • Mysterious check availability
  • The Red Makeup check availability
  • Scented Esthetic Collective check availability
  • Discuss Makeup check availability
  • Genial Gloss check availability
  • Containing Colloidal Gel check availability
  • Golden Glints check availability

Read our full guide on naming your makeup brand ➜

How To Create A Slogan For Your Makeup Brand:

Slogans are a critical piece of your marketing and advertising strategy.

The role of your slogan is to help your customer understand the benefits of your product/service - so it's important to find a catchy and effective slogan name.

Often times, your slogan can even be more important than the name of your brand.

Here are 6 tips for creating a catchy slogan for your makeup brand:

1. Keep it short, simple and avoid difficult words

A great rule of thumb is that your slogan should be under 10 words. This will make it easy for your customer to understand and remember.

2. Tell what you do and focus on what makes you different

There are a few different ways you can incorporate what makes your business special in your slogan:

  • Explain the target customer you are catering your services towards
  • What problem do you solve?
  • How do you make other people, clients, or your employer look good?
  • Do you make people more successful? How?

3. Be consistent

Chances are, if you're coming up with a slogan, you may already have your business name, logo, mission, branding etc.

It's important to create a slogan that is consistent with all of the above.

4. Ensure the longevity of your slogan

Times are changing quickly, and so are businesses.

When coming up with your slogan, you may want to consider creating something that is timeless and won't just fade with new trends.

5. Consider your audience

When finding a catchy slogan name, you'll want to make sure that this resonates across your entire audience.

It's possible that your slogan could make complete sense to your audience in Europe, but may not resonate with your US audience.

6. Get feedback!

This is one of the easiest ways to know if your slogan will be perceived well, and a step that a lot of brands drop the ball on.

Ask friends, family, strangers, and most importantly, those that are considered to be in your target market.

Here's some inspiration for coming up with a slogan for your makeup brand:

Best Aesthetics, Favorite Esthetical

Makeup Gets It Done On Time.

Pale Colorings Are What We Do

Psychological Makeup, We Take Care Of You!

Skin The Time Is Now.

Work Hard, Forming Harder

Makeup Online.

Smooth Hags Are What We Do

From Light To Harsh

Central Heating For Cosmetic.

Work Hard, Labelling Harder

Only Superficial, Only Makeover

Normal And Infernal

Life's Pretty Straight Without Makeup.

From Light To Broad

Work Hard, Abrade Harder

New Herbals Are What We Do

Makeups With State

Normal Skin, Let's Start Today!

There's Only One True Cosmetic!

The eCommerce Business Model

One of the main benefits of operating online is that you are exposed to the entire world, versus just one local area. Rather than depending on foot traffic, you have all the tools at your disposal to create exposure for your store online.

Additionally, there are much lower costs to operate an online store - fewer employees, you can operate from your home, and you get to create your own schedules (yes, holidays included!)

Although you are operating online and have the ability to connect with people all over the world, it's important to consider that you will need to invest marketing money upfront in order to promote your store to the right audience.

Gia Paddock, founder of Boutique Rye explains the 3 reasons why she decided to build an online store:

I wanted to find something I loved but also allowed me to stay home at the same time. While I was working at this local boutique, I realized that there was a lot of sitting around during the day when other people were out working. Therefore, an online business seemed like the best route for a few reasons:

  1. We didn’t have the extra funds sitting around to pay sign a year or two-year lease at a brick & mortar location.
  2. I realized the opportunity to reach a wider audience online compared to the audience of this small local boutique. For us, it seemed like hitting two birds with one stone.
  3. And finally (maybe the most important of all), running it as an online-only business would allow me to stay at home with Riley!
-  
Gia Paddock, on starting Boutique Rye ($10,000/month) full story ➜

The Brick & Mortar Business Model

When deciding whether or not to start a makeup brand, it's important to first decide what type of business model you want (brick and mortar, eCommerce, or both)!

Here are a few things to keep in mind when considering a Brick & Mortar store:

If you do plan to open a physical store, it's important that you find a spot in a high-traffic area. This is a great way to gain exposure for your business and also get new customers.

It's also important to consider the higher costs associated with operating a physical store (ie - employees, rent, utilities, etc) and the long days/hours associated with running a store.

The main benefit, however, is that customers love being able to see products in person. It's important to recognize that although some people enjoy shopping online, there will always be the shopper persona that likes to touch, feel, and see the product they're buying.

🎬 How To Start A Makeup Brand

article

How Much Does It Cost To Start A Makeup Brand

If you are planning to start a makeup brand, the costs are relatively low. This, of course, depends on if you decide to start the business with lean expenses or bringing in a large team and spending more money.

We’ve outlined two common scenarios for “pre-opening” costs of starting a makeup brand and outline the costs you should expect for each:

  • The estimated minimum starting cost = $6,957
  • The estimated maximum starting cost = $77,430
Startup Expenses: Average expenses incurred when starting a makeup brand. Min Startup Costs: You plan to execute on your own. You’re able to work from home with minimal costs. Max Startup Costs: You have started with 1+ other team members.
Employee & Freelancer Expenses
Payroll: This number depends on if you decide to pay yourself a salary upfront and how many employees you have on payroll. At first, many founders take on all responsibilities until the business is up and running. You can always hire down the road when you understand where you need help. Keep in mind, if you do plan to pay yourself, the average salary founders make is $50K. $0 $4,000
Other Employee Expenses: Aside from payroll and benefits, there are other costs associated with hiring employees. This includes the cost to advertise the job, the time it takes to interview candidates, and any potential turnover that may result from hiring the wrong candidate. $0 $1,000
Employee Reward Ideas: It's important to recognize and reward employees - whether they hit their goals or are doing an exceptional job. This doesn't have to cost you a lot - simply taking them out to lunch, giving them a gift card or offering a pay-check bonus are all ways to recognize your employee! Here are 65 ways to reward your employees. $0 $500
Total Employee & Freelancer Expenses $0 (min) $5,500 (max)
Equipment & Supply Expenses
Technology Office Equipment: This includes (but is not limited to) physical items such as: laptops, cameras, monitors, microphones, speakers, headsets. Technology needs grow as your company evolves, so to minimize costs, try and only purchase what is needed for you to run your business at the time. $500 $5,000
Cleaning Supplies: To get started, you may want to consider getting basic cleaning supplies. Note, that you may not need to buy all the cleaning tools and supplies at first. You can consider purchasing in bulk down the road. $25 $500
First-aid Equipment: For the safety of your team and customers, it's critical you have an adequate first-aid kit on you at all times. $25 $500
Total Equipment & Supply Expenses $550 (min) $6,000 (max)
Website Costs
Website builder: The cost of your website will vary depending on which platform you choose. There are many website builders on the market, so it's important you choose the right one for your business and overall goals. To learn more about your options + how to build a great website, check out this article. $15 $100
Web Design: Web design includes several different aspects, including webpage layout, content creation, and design elements.If you have the skills and knowledge to design your website on your own, then outsourcing this to an expert may not be necessary. There are plenty of other ways you can design a beautiful website using design tools and software. $200 $6,000
A Domain Name: Your domain name is the URL and name of your website - this is how internet users find you and your website.Domain names are extremely important and should match your company name and brand. This makes it easier for customers to remember you and return to your website. $12 $200
Email hosting: Email is a critical piece for running your business. Once you have your domain name, you will want to set up email accounts for each user on your team. The most common email hosts are GSuite (typically starting at $6+ per user, per month) or Microsoft Office (typically starting at $5+ per user, per month). The number of email accounts you set up will determine the monthly cost breakdown. $5 $75
Server Hosting: To start your business, you will need to set up and manage a server. The cost for this is typically billed monthly and depends on the platform you choose (typically ranging anywhere from $0-$50/mo). $0 $50
Website chat function: If customer service is a big piece of your business, you will want to consider implementing a chat bot on your website. Typically, there are different tiers of pricing and some businesses even offer freemium services. To find what chat software is best for your business, check out this guide. $0 $75
Total Website Costs $232 (min) $6,500 (max)
Business Formation Fees
Small Business Insurance: Depending on which state you live in and the business you're operating, the costs and requirements for small business insurance vary. You can learn more here. $500 $2,000
Permit and License Fees: Depending on your industry, there are certain licenses and permits you may need in order to comply with state, local, and federal regulations. Here is an article that goes over all the permits and licenses you may need for your makeup brand. $50 $700
Trademarking: Filing trademark registration will protect your brand and prevent other businesses from copying your name or product. USPTO has several different types of trademarks, so the cost to apply can vary (typically anywhere from $400-$700). $0 $700
Lawyer Fees: Although you may want to avoid attorney fees, it's important that your business (and you) are covered at all costs. This comes into play when creating founder agreements, setting up your business legal structure, and of course, any unforeseen circumstances that may happen when dealing with customers or other businesses. $0 $1,500
A Patent: Patents provide protection against others stealing or selling your idea.Securing a patent can be very valuable, but it's important that you are 100% sure this will be a smart business move for you, or if this is something to consider down the line.The process of securing a US patent can be both lengthy and pricey, and typically includes filing an application with the USPTO. $5,000 $15,000
Set up business: LLC & Corporations: The first step in setting up your business is deciding whether your business is an LLC, S Corp or C Corp. The cost for this depends on which state you form your business and which structure you decide on. We put together an article that goes over the 10 Steps To Setting Up A Business. $50 $500
Total Business Formation Fees $5,600 (min) $20,400 (max)
Retail Business Expenses
Shop Decor: If you plan to operate a physical store, you may want to consider decorating the place with wall decor, furniture, plants etc. $0 $5,000
Utilities (storefront business): This refers to the cost of monthly utilities for your storefront location, which is typically based on a per-square-footage rate. $0 $1,000
Building improvements and remodeling: If you plan to operate a physical location, you may find yourself dealing with building improvements and remodeling costs. Even if these costs are minimal, this is something to consider when renting/buying a physical location. $0 $950
Storefront Property Rent: This refers to the storefront space you rent or buy for your business. The cost depends largely on the city and the size of the space. Keep in mind that other costs may be involved with your base rent and your lease will define additional expenses you are responsible for. $0 $8,000
POS System: Gone are the days of cash registers! Many businesses now use point-of-sale systems for their checkout needs and to track sales and inventory. Here is a list of the best POS systems for small businesses! $0 $1,200
Total Retail Business Expenses $0 (min) $16,150 (max)
Inventory Expenses
Upfront Costs For Inventory: This includes all upfront inventory you will need in order to launch. Be sure to compare prices of wholesalers to ensure you're getting the best deal and margins remain high. $300 $5,000
Inventory Storage: If you decide to have a physical space for your makeup brand, whether it be used for inventory or as a showroom, you may have monthly rent payment or a large down payment associated with renting/buying the space. $0 $5,000
Package Design: Packaging refers to wrapping and protecting products during distribution, shipping, and sales.Your package design is your customer's first impression of your brand, so it's important you spend some time and energy to get this right from the start.Many businesses design their own packages using design software and tools. There is always the option to outsource this to a design expert, but that route tends to be much more expensive. $50 $3,000
Shrinkage: Shrinkage refers to the loss of inventory at any point between the purchase from your supplier and the purchase by your customer. Although you will try to avoid this at all costs, this does happen sometimes (especially in the learning stages of your business), and it's important to plan ahead financially in case this happens. Fortune states that retail shrinkage costs U.S. retailers approximately 1.4 percent of their total sales. $0 $1,000
Distribution costs: Depending on what distribution plan you choose, expenses such as renting vans, hiring delivery drivers and gas costs can add up. If you are looking to save money upfront, you may want to consider conducting distribution on your own. $0 $750
Total Inventory Expenses $350 (min) $14,750 (max)
Software Expenses
Design Programs & Software: These programs might include the Adobe family of design tools: Photoshop, Illustrator, InDesign and others. This is typically a monthly subscription ranging from $10-$50/mo. $0 $50
Email marketing tool: If you plan to grow your email list and email marketing efforts, you may want to consider investing in an email marketing platform (ie. Klaviyo, MailChimp). We put together a detailed guide on all of the email marketing tools out there + the pricing models for each one here $0 $100
IT Support: IT support installs and configures hardware and software and solves any technical issues that may arise.IT support can be used internally or for your customers experiencing issues with your product/service.There are a variety of tools and software you can use to help with any technical issues you or your customers are experiencing. This is a great option for businesses that do not have the means to hire a team of professionals. $150 $2,000
Accounting & Invoicing Software: It's important to have an accounting system and process in place to manage financials, reporting, planning and tax preparation. Here are the 30 best accounting tools for small businesses. $0 $50
CRM Software: CRM (customer relationship management) software is used to track your company’s interactions with clients and prospects. Although this is not a necessary tool to have for your makeup brand, implementing this in the beginning may set your business up for success and save you a lot of time later on. For a full list of best CRMs to use for your business, check out the full list here. $0 $250
Project Management Software: You may want to consider using a project management and collaboration tool to organize your day-to-day. This can also be very beneficial if you have a larger team and want to keep track of everyones tasks and productivity. For a full list of project management tools, check out this full list here. $0 $25
Internal Communication Tool: If you plan to have multiple members on your team, you may want to consider an instant message tool such as Slack or Telegram. The cost is usually billed per month (approx $5/user/month) or there are freemium versions available on many platforms. $0 $20
Social Media Management Tools: If you plan to do social media marketing for your makeup brand, you should consider investing in a social media automation or publishing tool. This will save you time and allow you to track performance and engagement for your posts. Here is a list of 28 best social media tools for your small business. $0 $50
Payroll Software: The main purpose of payroll software is to help you pay your team and track each of those payments (so that you don't have to do it manually). If you do not have any employees or have a very small team, payroll software may not be necessary at this stage. Here are the 11 best payroll tools for small businesses! $0 $200
Online data storage: It's important to make sure the information for your makeup brand is stored and protected should something happen to your computer or hard drive. The cost for this is affordable and depends on how much data you need to store. To learn more about the different options and pricing on the market, check out this article. $0 $299
Total Software Expenses $150 (min) $3,044 (max)
Advertising & Marketing Costs
Business Cards: A makeup brand involves quite a bit of customer interaction, whether that is attending tradeshows, sales calls or simply having face to face interaction with prospective clients. Business cards are a great way to stay front of mind with your clients. $0 $50
Customer Research & Surveys: Many makeup brand's conduct industry and consumer research prior to starting their business. Often times, you need to pay for this data or hire a market research firm to help you in this process. $0 $300
Business Signage: Business signs let people know they're in the right place and are one of the first impressions your customer will have of your business.The cost for signage depends on a variety of elements:- material- size- number of colors- durability- installation and laborThere are plenty of design tools and software to create your own signs, or you can hire a sign business to do this for you. $75 $2,486
Direct Campaigns, Printing and Mailing: Although it may sound old-school, traditional marketing methods can be a cost-effective way to drive awareness for your brand. This includes flyers, postcards, sales letters, coupons, special offers, catalogs and brochures. $0 $300
Affiliate Marketing Commission & Fees: If you want to increase revenue for your makeup brand, affiliate marketing is a great way to promote your product to a new audience. When determining affiliate commission rates you will offer, you will want to take into account the price and margin for your product to ensure affiliate marketing is worth it for your business. According to Monitor Backlinks, the average affiliate commission rate should be somewhere between 5% to 30%. To learn more about how to set commission rates, check out this article.. $0 $250
Influencer Marketing: Partnering with like-minded influencers is one of the most effective ways to grow your social media presence. Many small businesses simply gift a free item in exchange for an influencer post, or pay the influencer directly. $0 $750
Google Ads: With Google Ads you have the ability to control how much you spend by simply setting a monthly budget cap. Additionally, with these ads you only pay for results, such as clicks to your website or phone calls! It's okay to start with a small budget at first and make changes accordingly if you see valuable returns. $0 $300
Facebook & Instagram Ads: With Facebook and Instagram ads, you set your budget and pay for the actions you want (whether that be impressions, conversions, etc).You can learn more about pricing based on your impressions here. $0 $350
Total Advertising & Marketing Costs $75 (min) $4,786 (max)
Other Expenses
Credit Card Processing Fees: If you process credit cards then you will need to deal with interchange fees - which is usually around 3% of total charges. These fees are often forgotten about and can hurt cash flow if not taken into account. $0 $300
Total Other Expenses $0 (min) $300 (max)
Total Starting Costs $6,957 (min) $77,430 (max)

Raising Money For Your Makeup Brand

Here are the most common ways to raise money for your makeup brand:

What Skills Do I Need To Succeed In Starting A Makeup Brand?

As a makeup brand, there are several essential skills and characteristics that are important to identify prior to starting your business.

Let’s look at these skills in more detail so you can identify what you need to succeed in your day-to-day business operations:

Advice For Starting A Makeup Brand

We've interviewed thousands of successful founders at Starter Story and asked what advice they would give to entrepreneurs who are just getting started.

Here's the best advice we discovered for starting a makeup brand:

Colin McIntosh, founder of Sheets & Giggles ($200K/month):

Build a business model first, not a product. So many entrepreneurs spend time and money building a solution for a problem they perceive without ever validating that it’s a viable business.

Read the full interview ➜

-

Adam Elliot, founder of D*** At Your Door ($25K/month):

What started as a joke quickly became a viable business with real opportunity.

Read the full interview ➜

-

Harris Derner, founder of Brine Brothers ($10K/month):

We invested a total of $11,000 in 2016 and had a business valuation of $200,000 3 years later.

Read the full interview ➜

-

Michael Vahey, founder of Breathe Healthy ($90K/month):

Don’t let the naysayers bother you: they are probably just jealous anyway.

Read the full interview ➜

-

Write a Business Plan

Writing a business plan from the start is critical for the success of your makeup brand.

Why?

Because this allows you to roadmap exactly what you do, what your overall structure will look like, and where you want to be in the future.

For many entrepreneurs, writing out the business plan helps validate their idea and decide whether or not they should move forward with starting the business.

You may want to consider expanding upon these sections in your business plan:

  • Executive Summary: Brief outline of your product, the market, and growth opportunities
  • Overviews and Objectives: Overview of your business, target customers, and what you need to run your business
  • Products and Services: Specifics on the products and services your business will provide
  • Market Opportunities: Analysis of customer demographics, buyer habits and if your product is in demand
  • Marketing: Outline of your marketing plan and how you plan to differentiate yourself from other customers
  • Competitive analysis: Analysis of your competition and the strengths and weaknesses therein
  • Operations: Hierarchal structure of the company and what it will take to run the business on the day-to-day
  • Leadership Team: Detailing roles and responsibilities of each manager based on their specific skill-set
  • Financial Analysis Understanding of all expenses, operating budgets, and projections for the future.

Learn more about how to write a business plan here

Determine Which Business Bank Account You Need

There are hundreds of banks out there, and it can be overwhelming to find one that's right for your business.

Here are some factors you may want to consider:

  • Location - Is your bank close enough that you can easily make deposits or get cash?
  • Low Fees - Make sure to understand any and all fees associated with setting up and maintaining your bank account. Ask for a list - banks usually try to keep this hidden and in the fine print.
  • Online Banking Services - Make sure you can easily navigate through your online portal and you have easy access to everything you need.
  • Line of Credit - What do your options look like (even if you don't need this now, you may need this down the road).
  • Every bank has something that differentiates them from the rest, so make sure whatever that is applied to your needs and values.

Check out this list of the 13 Best Banks for Small Business in 2020 and what makes them so unique.

Setting Up Your Makeup Brand (Formation and Legal)

When it comes to setting up your business, you may find yourself in a place where you have to make some financial and legal decisions.

The first thing you'll want to decide on is whether you want to be an LLC, S-Corp, or C-Corp.

These three options are found to be the most common when starting a small business, and all serve to protect your personal assets and also provide you with certain tax benefits.

  • LLC: All income and expenses from the business are reported on the LLC personal income tax return.
  • S corp: Owners pay themselves salaries + receive dividends from profits.
  • C Corp: C Corps are separately taxable entities that file a corporate tax return (Form 1120). No income tax is paid at the corporate level and any tax due is paid at the owners individual expense.

Depending on where you're conducting business, you'll also want to consider securing the proper permits, licenses and liability insurance.

Learn more about securing the right permits and licenses ➜

Need to start an LLC? Create an LLC in minutes with ZenBusiness.

How Do I Pay Myself As A Small Business Owner?

Most entrepreneurs start a business to do something they love- but at the end of the day, you still have bills to pay (maybe now more than ever).

But it's important to strike the right balance - if you pay yourself too much, you could be putting your business at risk.

There are two common ways to pay yourself as a business owner:

1. Owner's Draw

Many entrepreneurs pay themselves through an owner's draw. This means that you are technically sean as "self-employed" through the eyes of the IRS and are not paid through regular wages.

At the point that you collect money from the draw, taxes typically are not taken out - so make sure you are prepared to pay these taxes once you file your individual return.

As an owner who takes a draw, you can legally take out as much as you want from your equity.

This type of compensation is suited for Sole props, LLCs, and partnerships. If you’re an S corp, you can pay yourself through both a salary and draw if you choose.

2. Salary

If you decide to pay yourself a salary, you will receive a set and recurring amount. This will be taxed by the federal government and the state you reside in.

The reality is that it can be really complicated to set your own salary, so we have some tips for you to consider:

  • Take out a reasonable amount that allows you to live comfortably but also sets your business up for success
  • Consider the number of hours you are working weekly + the type of duties you are performing.
  • Set your salary based on your industry-standard, location, and profits (or projected profits)
  • Look at your P&L statement: Deduct your own pay from that amount. This is important so you can first tackle important business expenses, and then pay yourself from the amount leftover.
  • Pick a payroll schedule (and stick to it)! In the US, it's most common to pay yourself and employees twice a month.

https://media.giphy.com/media/xT0xeLTRncS90ptpfi/giphy.gif

To learn more about how to pay yourself and what is a reasonable amount, check out this article.

How To Price Your Makeup

One of the most challenging aspects to starting a makeup brand is determining how much to charge for your makeup.

When businesses under-price their product, this can be extremely detrimental to their bottom line and reputation.

Often times, businesses under-price their products to drive demand and volume, but that last thing you want is for customers to view your product/service as "cheap." Additionally, this can have a big impact on the type of customer you attract, which can be difficult to recover from.

On the other hand, when businesses over-price, this tends to be just as damaging to the business.

When customers buy, it's likely that they will explore the internet and look at other competitors to ensure they're getting the best value + deal. This is why it's so important that you research your competition and understand where you land in the marketplace.

Here are some factors to consider when pricing your product:

Understand your customer

It's important that out of the gates, you identify the type of customer you want to attract and how much they're willing to pay for your service. One great way to do this is by surveying your customers. Here are some important items you'll want to takeaway:

  • Customer demographic: Age, gender, location, etc.
  • Buying habits of your customer: What they buy + when they buy
  • Level of price sensitivity with your customer

All of these segments will help you identify the type of customer you're attracting and how to price your product accordingly.

Understand your costs

When pricing your makeup, it's critical that you first identify all of your costs and consequently mark up your makeup so you can factor in a profit.

The actual cost of your makeup may include things like:

  • The actual cost to make the product (ie. raw materials, supplies, manufacturer).
  • Shipping + overhead fees
  • Rent
  • Operating costs to run your business

You may want to consider creating a spreadsheet with every single expense involved in operating/owning your business. This will give you an idea as to what you need to generate in order to at the very least, break-even and will help you price your products to factor in a profit.

Create revenue goals

When determining the price of your makeup, you'll want to create goals for revenue + how much profit you want your makeup brand to make.

This process is simpler than you may think:

  1. Think about your breakeven cost (by completing the above step).
  2. Create a revenue goal based on your break-even cost
  3. Evaluate the # of items you plan to sell in a given period (make sure this is a realistic number)
  4. Divide your revenue goal by the number of items you plan to sell

This figure will help determine your estimated price per product in order to meet your revenue goals.

Evaluate your competition

The last piece in determining how to price your makeup is by simply looking at your competition.

The best way to do this is by finding like-minded businesses that offer product(s) with similar perceived value. Then, you can compare prices of the different businesses and determine where your makeup fits best in the marketplace.

All of these factors play an equal part in pricing your makeup, so it's important you evaluate each one individually to come up with an accurate price that will help optimize your business from the start.

What Type Of Customers Will Buy Your Makeup

It's important to first establish who you will be selling to, whether it's to businesses or consumers.

Typically, in this industry, products are sold to B2C markets (business-to-consumer).

Let's take a look at what this means for your makeup brand:

B2C (or business to consumer) is a transaction where businesses sell their products or services to the consumer directly.

In this market, consumer behavior is the primary driver for your business decisions - so it's important that you truly identify who your customer is, and what their buyer habits are when building your product/service.

The advantage

B2C is that you are able to cast a very wide net when targeting your customers. Your product may interest a large number of consumers or a specific niche.

The disadvantage

B2C is that consumers hold all the power - so if your website is not the most user friendly, or does not rank in the top search results on Google, chances are, your customer is going to shop elsewhere.

When building your makeup brand, it's critical that you hone in on who your target audience is, and why they need your product over your competition.

Here are some items to consider when identifying your buyer persona:

article Source

Design A Prototype

Turning your idea into a reality can feel like a daunting task - but it's critical that you have an idea of what your product will look like (even if it's just a sketch) prior to finding a manufacturer.

Here are some common ways you can design your prototype:

  • Draw Your Initial Design on Paper
  • Form pieces of fabric together
  • Consider Taking A Generic Product And Putting Your Own Brand On It
  • Try Making the Product Yourself
  • Consider Building A Prototype With A 3D Printer

To learn more about how to design and prototype a product, check out our latest guide here.

How To Find A Supplier For Your Makeup Brand

Here are the steps to consider when finding a supplier/manufacturer:

Know your design

One very critical step to finding the right supplier is having an initial idea of what your design/product will look like.

Sketching is one of the most simple ways to get started in the design phase.

What's great about sketching is that you can practically do this anytime, anywhere - even on the back of a napkin.

To get started, all you need to do is pick up a pen and paper and start drawing - or if you are working on a virtual/software product this can be a diagram that outlines the user interface or experience.

Decide your supplier type

You'll want to identify the type of supplier you are looking for.

Here are some questions you may want to ask yourself prior to searching for a supplier

  • Are you looking for a manufacturer to produce your product idea?
  • Do you want to find a supplier that can simply purchase existing products for you?
  • Do you want a drop-shipper to supply and fulfill orders?
  • Do you want a domestic supplier or an overseas supplier? Read more about the pros and cons of each here

Where to start your search

Once you have an understanding of what type of manufacturer/supplier will be best to bring your idea to life, there are several areas you can start your search:

Domestic Suppliers

Overseas Suppliers

Manufacturing Your Product In House

It's also very common to manufacture your makeup on your own - either from your home or in a commercial space.

In order to get the product right, you may want to consider experimenting with different designs and recipes until you find the perfect one.

Some founders choose to manufacture their product in-house so that they can control quality, manage costs, and easily handle production/logistics.

Down the road, you can always choose to outsource your makeup.

Leslie Eisen, founder of AlmondClear discusses how to manufacture products in house

If you want to start a line of unique products, then you have two basic options: you can make them yourself, or you can find a manufacturer to work with that creates custom formulations for their clients.

I knew that I was trying to build a larger-scale business and that the home-made model wasn’t right for me, so I had to find the right manufacturing partner. It took a lot of research, phone calls, and emails before I found the laboratory that met my needs.

I wanted to create unique products (as opposed to private label), so I worked with the manufacturer’s chemist who specializes in skin care formulations. This process takes some time!

First, you have to tell the chemist what kind of product you’re looking for, the ingredients that you want to include or leave out, and what you want the final product to look like/feel like/smell like, etc.

Then, the manufacturer sends you the first sample, you try it out or give it to others to try, and then provide feedback for revisions. In my case, the first two products came together fairly easily because I only needed to make small changes to stock formulations.

There are many, many rules and regulations around cosmetics and skin care products. If you want to sell products that contain FDA regulated ingredients then you have to register and get a permit.

My products aren’t FDA regulated, so I didn’t have to go through this step, but I did have to be aware of the many guidelines and standards around labeling and safety warnings. Some people hire a lawyer to help them through this process, but my manufacturer was able to guide me through the regulatory process.

The entire process, from researching labs to work with to having the first finished products shipped out to me, took around six months.

-  
Leslie Eisen, on starting AlmondClear ($15,000/month) full story ➜

Purchasing Inventory For Your Makeup Brand

When first starting out, it's important to start small with your overhead to get a gauge for what people want.

Just remember - if you order a line of items that don't sell, it's nearly impossible to recoup the money lost.

Buying the right inventory takes research and planning in order to get it right.

  1. Identify your target audience: Identify the age, gender, annual income that you will be selling to. This is a defining factor in ordering the right inventory that will sell.
  2. Research your competition: Conduct market research and identify the different types of styles, price points, and materials being used. This will help you see what's trending and ways that you can improve/stay ahead of the competition.
  3. Create an inventory wishlist: Identify what you need for the launch of your business and create a budget that you will stay within. Remember, it's okay to start small.
  4. Find a supplier Make sure to first compare prices and analyze different options.
  5. Delivery timing: Schedule the inventory delivery to match with seasonality and trending buying seasons

Pro-tip: It's easy to become biased based on your own fashion preferences on what types of shoes/apparel to purchase. This is where a lot of fashion businesses go wrong. It's important to base purchase decisions on current buyer behavior, trends in the market, and specific to your niche.

Erin Hooley, founder of Bailey's Blossoms tells us how poor inventory projections led her to lose over $2M

When we first launched Peyton Bre we did so in a social or direct sales model.

Through poor inventory projections we were forced to change models but only after losing $2 million dollars.

It was a devastating time for us and one we were not sure we could survive.

I have since become very intentional about the way that we project our inventory needs and we continue to refine that quarterly and even monthly. We have created a KPI for the cost of goods sold to help us hold ourselves accountable.

Ultimately, the better we manage our inventory the less we have need to discount and the healthier our profit margin becomes.

This is, of course, a very high-level overview of the importance of inventory control.

To see the full breakdown on how to manage inventory, check out my guide over on my blog..

article

-  
Erin E Hooley, on starting Bailey's Blossoms (/month) full story ➜

🚀 How To Launch Your Makeup Brand

article

Build A Website

Building a website is imperative when launching your business, and with the right tools in place, this can be a simple task to check off the list (without having to hire someone).

  1. Pick a domain name that's easy to remember and easy to type
  2. Choose a Web Hosting Plan (ie. Shopify, Squarespace)
  3. Make sure you choose the right theme and design
  4. Implement the proper page structure (ie. about page, contact page, pricing etc)

To learn more about how to build a stellar website with little stress, we give you all the details on this step-by-step guide.

Leave a comment
Your email address will not be published.